Last week’s news that Amazon is investing in an air cargo hub may not be the right answer, according to Jonathan Bellwood, founder & CEO, Peoplevox
As reported last week, in a bid to get even closer to customers Amazon is now investing $1.5bn in an air cargo hub to support a fleet of “Prime Air” cargo planes. Making numerous daily flights to far-flung destinations, the name of the game is gaining end to end control of the supply chain.
Clearly, to maximise sales opportunities and keep the customer satisfied with next and same day prime deliveries, no matter where or what time zone they’re in, makes Amazon’s bold move into the carrier market absolutely necessary. Or does it?
Will taking to the skies with a fleet of 40 freight planes, or 100 or more for that matter, cut it when it comes down to ensuring right place, right time deliveries at the local level? Will it make all the difference in the fulfilment efficiency of the local seller warehouses and the quality of the courier firms handling ‘the last mile’?
What Amazon may have underestimated here is the weakest link in the supply chain, the fulfilment capabilities of its sellers, or, more specifically their warehouses. Many of these seller warehouses are too inexperienced to match Amazon’s expertise in logistical management excellence.
Other than moving a seller’s stock into its warehouses, something that doesn’t appear to gel with Amazon’s lean and mean model for operating warehouses and distribution centres, the company may need to consider evaluating and then optimising the quality of the connection its sellers already have with their own warehouses, enabling them to become universally ‘Prime Ready’.
Connecting all of its seller warehouses on a truly global scale would allow Amazon to accomplish its mission for ensuring uniform Prime delivery on a global scale. No amount of planes, or trains and automobiles, can achieve this alone.
Central to such a strategy would be ensuring all seller warehouses are equipped with fit for purpose e-commerce WMS systems, not least for enabling real-time insight into stock actually available for sale at any given time. This would go far towards mitigating any risk of inadvertent ‘over- selling’ or ‘under-selling’ of items. It will also ensure accuracy in their picking, packing and despatch. Even the small size of many of these warehouses can be played to advantage when looking to maximise productivity and meet the seamless, universally high delivery performance Amazon desires and expects.
Ignore this, and sellers could adversely impact on Amazon’s reputation in its quest for worldwide retail market domination. Underestimating the critical role warehouse and fulfilment plays in each and every warehouse could result in customer dissatisfaction if too many items ordered are out of stock, not as ordered, don’t get delivered as promised – or not at all.
As always, even though the online ordering process can be smooth as can be, it is a clunky fulfilment and delivery experience that customers remember the most and which may cost sales – no matter what company you are, from retail goliath to new start up.
Jonathan Bellwood is founder & CEO of ecommerce warehouse management and fulfilment specialists, Peoplevox.